Understanding CDBG-DR Housing Recovery: A Focus on Swannanoa
- sjordan95
- Jun 5
- 5 min read
On June 10, ISD and StateBook will host Stan Gimont and LC Clemons for a conversation about CDBG-DR housing recovery. Stan has years of experience at HUD, where he designed and oversaw CDBG-DR. He will provide an overview of its design and purpose. LC has spent the last eighteen months on the ground in Swannanoa, working with twelve locally-rooted business owners trying to rebuild. He will share his experiences and the implications for small-town recoveries. This blog aims to provide important background for the upcoming webinar.
Interested in attending? Register for the June 10 webinar here
The Program and the Gap
The Community Development Block Grant Disaster Recovery program (CDBG-DR) is the federal government's primary tool for long-term housing recovery after major disasters. When a hurricane or other disaster devastates a neighborhood, CDBG-DR is intended to help rebuild it.
North Carolina is receiving CDBG-DR funds for Hurricane Helene recovery. One of the housing programs these funds will support is the Small Multifamily Rental Program, designed to restore rental housing in disaster-impacted communities.
However, this program has a cap of four units. This means that a duplex qualifies, a triplex qualifies, and a fourplex qualifies. But anything larger, such as a courtyard building or a mixed-use live-work block, does not qualify.
In a large city, this gap may be inconvenient. In a small town like Swannanoa, it can mean the difference between recovery and slow disappearance.
From a policy perspective, there is broad bipartisan support for protecting small towns and rural communities. However, there is no equivalent to the Small Business Administration for housing recovery. What we need is a layered approach that considers the unique structural needs of small towns and neighborhoods that cannot sustain large developments.
What Swannanoa Actually Needs
Swannanoa is an unincorporated community in Buncombe County, just east of Asheville. It sits in a river valley. On September 27, 2024, Hurricane Helene caused the Swannanoa River to crest at 35 feet. This event has been called the most significant short-term geological event in the Southern Appalachians in 10,000 years. Tragically, thirty of the storm's 230 fatalities were from Swannanoa. Additionally, more than 300 businesses in the surrounding area closed, either temporarily or permanently.
ISD Fellow LC Clemons arrived one month after the disaster and has been dedicated to the community ever since.
Over the past eighteen months, LC has worked with locally-rooted, disaster-impacted business owners on various mixed-use redevelopment projects. These are not outside developers looking to move in. They are Swannanoa residents—born here, built businesses here, and lost everything here—trying to rebuild the downtown that was washed away.
Potential Projects for Swannanoa
Examples of projects that could be developed, if they could be funded, include:
A seasonal pop-up vendor space
A community garden
Six commercial spaces surrounded by rental units
For structural and other reasons, none of these projects have more than 18 units attached to them. This would truly be a mixed-use redevelopment that not only brings the area back better than before but also validates the commitment of the people who have persevered through almost two years of waiting for housing assistance to rebuild what took them a lifetime to create.
Unfortunately, every single one of these projects fails to qualify for the Small Multifamily Rental Program—not due to design, but because of eligibility rules that were written without small-town recovery in mind.
Why the Rules Don't Fit
The eligibility barriers are specific and, taken individually, seem defensible. However, together they form a wall:
The program requires more than four units, eliminating two proposed projects.
It mandates that the property had residential units occupied by renters at the time of the disaster, which eliminates commercial properties, even when owners are trying to rebuild residential units on them now.
It stipulates that the project applicant must be the same person who owned the property at the time of the disaster, which eliminates locally-rooted new buyers.
It requires that applicants use state-selected design, engineering, and construction teams, which excludes projects with local architects and builders already committed.
Additionally, some properties sit in the 100-year floodplain, creating its own regulatory tangle, even though the projects are specifically designed with flood mitigation engineering to address that risk.
As a result, five projects representing 40 units of housing, 11 commercial spaces, and a dozen locally-rooted business owners cannot access the primary housing recovery program North Carolina is deploying in their community.
The Broader Problem: Small Towns and Unincorporated Areas
Swannanoa is not unique; it is representative of a broader issue.
The CDBG-DR program was primarily designed around urban multifamily housing markets, focusing on large rental properties and institutional owners. In those contexts, a four-unit cap on small multifamily makes sense as a targeting mechanism. Larger projects are where the money is needed.
However, small towns and unincorporated communities are built differently. Their housing stock is dominated by the types of buildings that the program does not fund—the fourplex-to-twenty-unit range that urbanists call the "missing middle." These buildings line small-town main streets, placing apartments above shops and creating the mixed-use fabric that makes a community walkable and economically viable.
When a flood destroys that fabric, the path back runs directly through the middle of the housing spectrum that CDBG-DR can't reach.
The county will receive the CDBG-DR allocation. Counties tend to spend on what they know how to manage—larger infrastructure projects, established development partners, and programs with clear compliance pathways. The five projects LC is working on in Swannanoa are locally-rooted, creatively structured, and designed to restore the community's character, not just its unit count. There is a real risk that the money arrives in Buncombe County and flows to projects that don't resemble what Swannanoa truly needs.
What a Fix Would Look Like
The solution is not to abandon CDBG-DR; rather, it is to fix the targeting rules for small-town and rural recovery contexts. Specifically, we need to:
Raise the unit cap for communities below a certain population threshold or in unincorporated areas.
Allow locally-rooted buyers to access funds as applicants, even if they were not the property owners at the time of the disaster, provided they can demonstrate ties to the community and a commitment to locally-owned operation.
Create a pathway for projects in the floodplain that incorporate flood mitigation engineering—the current rules effectively prohibit resilient redevelopment in the places that need it most.
Allow local design and construction teams, subject to the same oversight and compliance requirements as state-selected teams.
None of these changes require new legislation. They require HUD and state grantees to use the flexibility that CDBG-DR's design intentionally provides and to apply it in service of the communities the program exists to help.
Join Us on June 10
Stan Gimont will explain how CDBG-DR is designed and where the flexibility in the program actually resides. LC Clemons will walk through the Swannanoa projects—the people behind them, the eligibility barriers they face, and what it would take to get them funded.
This is a free webinar, open to anyone working on disaster housing recovery—state and local officials, chamber executives, LTRG members, nonprofit leaders, and anyone who wants to understand the policy landscape on the ground.
LC Clemons is an ISD Senior Fellow embedded in Swannanoa, NC since October 2024. Stephen Jordan is the Executive Director of the Institute for Sustainable Development.
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